Kazakhstan and Russia Signed Deal to Export Wheat to Iran

18.02.2019 11:18

1923

The Islamic Republic of Iran, the Republic of Kazakhstan and the Russian Federation have finally agreed on exporting wheat as the three countries inch closer to the free trade zone with the European Economic Union (EAEU).

The countries signed a memorandum of understanding for five-year cooperation in wheat trading on Feb. 12th this year. Talks about the deal began in early 2018.

Under the agreement, Iran will import wheat from Kazakhstan and Russia, both members of the EAEU. The imported wheat will be processed as flour by the country before it is being exported to neighboring countries such as Afghanistan, Syria and Iraq.

Iranian Deputy Minister of Agriculture Ali Akbar Mehrfard said currently the exact amount of wheat to be exported is not set under the deal as it is up to the private Iranian private millers to decide.

“The memorandum covers three important aspects. Firstly, Russia and Kazakhstan can use Iran’s logistical capabilities to transit and deliver their wheat to third countries. The second aspect covers the joint development of wheat SWAP contracts with Russia and Kazakhstan.”

“The third aspect is related to the conditions of temporary importation,” Mehrfard told reporters at the signing ceremony on Feb. 13th this year.

He also added that the memorandum also does not specify the currency to be used for the trading activity, although the countries can trade in their national currency.

Iran does not export its locally-produced flour and it has enough wheat to meet the flour demand in the country.

Meanwhile, Deputy Agriculture Minister of Kazakhstan Gulmira Isayeva said Iran is a promising market for Kazakhstan as the country seeks to expand its wheat export market.

She said Kazakhstan supply between 500,000 and one million tonnes of wheat on average per year. In 2018, the country exported a total of 11.7 million tonnes of grain.